Settle with vendors

You pay a consignment vendor only for what you sold or bought out. Each consignment sale already created a purchase order to the vendor and posted its receipt together with your shipment. Settlement means invoicing those purchase receipts: normally one purchase invoice per vendor per period, posted with standard Business Central purchase posting.

What the vendor is paid

The price on the consignment purchase lines follows the vendor's terms in the Consignment group of the vendor card:

Settlement Method	Purchase price
Purchase Price	The normal purchase price: the vendor's purchase price list, or the item's last direct cost
Percent of Sales Price	Vendor Share % of the sales line's unit price after line discount, excluding VAT, converted to the purchase currency and unit of measure

Vendor Share % can be entered only when the method is Percent of Sales Price, and the consignment fields only for a vendor with Consignment Vendor on. For Percent of Sales Price, a share on the Item Vendor Catalog (Vendor Share % for that item and vendor) overrides the vendor card. A share of 0 on the catalog means the vendor card share applies.

See what is waiting

• The Receipts to Settle cue in the Consignment group of the Purchasing Agent role center counts consignment purchase receipt lines that are received and not invoiced yet.
• The Consignment FactBox on the vendor card shows the vendor's Stock on Hand, its informational Vendor Stock at Cost (LCY), what was Received This Month and Sold This Month in the month of the work date, and the units Sold, Not Invoiced with their expected amount. Choose them to open the Consignment Unsettled Liability report.
• For the month-end accrual, run Consignment Unsettled Liability with the last day of the month as As of Date: it lists every sale and buy-out the vendor has not invoiced and every customer return not credited at that date, at the expected settlement price. Find it on the vendor card (Report > Consignment), on the Consignment Settlement page and in the role center's Settlement & Reports group.
• When you check the vendor's invoice, the Consignment Settlement FactBox on the purchase invoice shows, under This Document, the consignment lines and the Units Sold, Units Bought Out, Customer Returns and Warehouse Mode Units it settles, with their Sales Amount (LCY) and Consignment Amount. Vendor Terms shows the settlement method and share, and Vendor, Still to Settle what of the vendor is on no invoice yet.

Create the vendor invoices

1. Search for Consignment Settlement, choose Consignment > Consignment Settlement on the vendor card, or open it from the role center (Consignment > Settlement & Reports).

2. Enter the Up to Date and, optionally, the Vendor No. The page lists the consignment purchase receipt lines that are received and not invoiced, per vendor, with Qty. Rcd. Not Invoiced and Direct Unit Cost side by side. Below it, Return Shipments to Credit lists the consignment return shipments not invoiced yet and, when a location uses Warehouse Mode, Warehouse Mode Units to Charge lists the units sold or bought out there.

3. Select the receipt lines to invoice and choose Create Settlement Documents. A confirmation shows how many receipt lines, return shipment lines and Warehouse Mode lines it takes, and for which vendors. It creates in one step:

   • one purchase invoice per vendor with the selected receipt lines, using the standard Get Receipt Lines logic;
   • on that invoice, an item charge for every Warehouse Mode line listed (filter the part to leave some out); a vendor with only charges gets an invoice too;
   • one purchase credit memo per vendor with the listed return shipments of the vendors you invoice.

   To credit returns without invoicing anything, select them in Return Shipments to Credit and choose Credit Returns Only there.

4. Open each invoice, enter the vendor's invoice number in Vendor Invoice No., check the amounts against the vendor's invoice and post it as usual.

Print the settlement summary

The Consignment Settlement Summary is the statement behind a consignment invoice: one row for each unit or lot the invoice pays the vendor for. A row shows the date, the item, the quantity, the sales amount, the invoice unit cost and the amount. A detail line under it shows the origin (Sale, Ownership Change, Consignment Receipt, or a Warehouse Mode charge), the sales order or source document, the variant, the serial and lot number and, with Show Customer, the customer. Credits for customer returns follow as negative rows. Totals per origin and the net total close the page. Send it with the invoice so the vendor can check what they are paid for.

• On an unposted consignment Purchase Invoice, choose Print Settlement Summary (in Invoice). It prints as a draft, so you can agree it with the vendor before you post.
• On a Posted Purchase Invoice, choose Print/Send > Settlement Summary to print it, or the arrow next to it > Send Settlement Summary to email it with the vendor's document sending profile.
• On the Consignment Settlement page, choose Report > Settlement Summary. On the vendor card, choose Report > Consignment Settlement Summary. Both include unposted settlement invoices. Set the Posting Date filter for a period.

Option	Meaning
Include Unposted Invoices	Print the vendor's unposted consignment settlement invoices too, marked as drafts
Include Credit Memos	Print the vendor's consignment credit memos posted on the same date (for a draft: the unposted consignment credit memos) as credits
Show Customer	Print the customer of each sale. Leave it off when the vendor must not see your customers
Show Serial and Lot Numbers	Print the serial and lot number of each unit

The report uses the report selection usage Consignment Settlement Summary on Report Selection - Purchase.

With standard Business Central only

You can also settle without the settlement page, because every consignment sale is a normal drop-shipment purchase receipt:

1. Create a purchase invoice for the vendor.
2. Choose Lines > Functions > Get Receipt Lines and select the receipt lines of the consignment purchase orders.
3. Enter the Vendor Invoice No. and post.

Or invoice each consignment purchase order directly with Post > Invoice.

Send the consignment statement

The Consignment Vendor Statement tells the vendor what happened to its stock in a period, per item: opening stock, received, sold, returned to the vendor, adjusted and closing stock, with serial and lot detail for the period.

1. On the vendor card, choose Consignment > Consignment Statement to print it, or the arrow next to it > Send Consignment Statement, or search for the report.
2. Enter the period and choose Print or Send.

The statement uses the report selection usage Consignment Vendor Statement on Report Selection - Purchase, so it can be emailed with the vendor's document sending profile like any other purchase document.

Schedule the statements

Bitta Consignment can email the statements every month by itself, to vendors and to consignment customers.

1. On the vendor card (and on the customer card for customer statements), turn on Send Statement in the Consignment group. The email goes to the address in Document Layouts for the statement usage, or else to the card's Email.
2. In Consignment Setup, choose Statements > Schedule Statements. The job queue entry opens, created On Hold: it runs on the first working day of each month (by the company's base calendar, Monday to Friday without one) at 07:00.
3. Check the entry and choose Set Status to Ready.

Each run sends the statement of the previous calendar month through the email account of the Default scenario in Email Accounts. The Log Entries of the job queue entry have one line per vendor and customer: sent, not sent (no stock and no movements, or that month was already sent), or failed with the reason, such as a missing email address. One failure never stops the others. When one failed, the run ends with an error, so the job queue entry shows it and retries an hour later; a retry sends only the statements that are still missing. Statement Sent Through on the card shows the last month sent; clear it to send that month again.

Confirm the vendor's stock for the audit

At year end, auditors ask the vendor to confirm the stock you hold for them. On the vendor card, choose Report > Consignment Stock Confirmation (or the arrow next to it > Send Consignment Stock Confirmation). To print or send letters for many vendors at once, select them on the Vendors list and choose Report > Consignment Stock Confirmations (or the arrow next to it > Send Consignment Stock Confirmations).

The letter lists the vendor's consignment stock as of the As of Date, per location, bin and item (and with Show Serial and Lot Numbers, per lot and serial), with a reply section to tick (correct, or not correct with the differences) and a signature block. Show Values adds the Value (LCY) column and its total, with a note that the values are informational; without it the column is left out. Enter a Reply by Date to print it on the letter. The action on the vendor card fills in that vendor on the request page. Skip Letters without Stock leaves out vendors with no stock at the date. The report uses the usage Consignment Vendor Stock Confirmation on Report Selection - Purchase.

Ownership change receipts

When you buy vendor stock into your own inventory with an ownership change, the purchase order is received at once and its receipt is invoiced through the same settlement. See Buy-out and aging.

Good practice

• Settle once a month, after the last shipment of the month is posted.
• Compare the vendor's invoice with the statement before you post.
• To charge the vendor for storage, handling or rented space, add the fees to the settlement invoice or post a credit memo. See Charge vendor fees.
• Customer returns that go back to the vendor's stock create a purchase return order, and the vendor credits you. Post the credit memo before you settle so the net amount is right. See Returns.

What's next

Return stock to the vendor or from customers: Returns.